The Utah economy has continued to break national records for growth, adding more than 10,000 jobs in the construction industry and more than 11,000 in the trade sector. In the past weeks Utah was named the No. 1 state in "Economic Competitiveness" by the American Legislative Exchange Council and the Beacon Hill Institute at Suffolk University.
But no matter how many doors are open at the state level, federal policies and even foreign politics can tilt the playing field, closing doors on Utah businesses that are already taking steps toward making our state a national focal point of economic growth.
A perfect example of this challenge is the U.S. Air Force's consideration of a bid by French contractor EADS to manufacture a new fleet of aerial tanker aircraft. The tanker contract is a top defense acquisition priority worth some $40 billion and could support some 44,000 jobs for American manufacturers and possibly bring $22 million in investment to Utah. That, along with more than 600 local jobs at Boeing facilities and cutting-edge parts suppliers like Moog Inc. in Salt Lake City and Parker Hannifan Corp. in Ogden.
However, if the Department of Defense awards the contract to EADS and minority partner Northrop Grumman, the companies plan to send tens of thousands of jobs and tens of millions of dollars in investment overseas.
EADS' weak numbers on domestic investment aren't the only strike against the company. EADS has also tilted the playing field by using some $100 billion in subsidies provided by the European Union in order to win the tanker contract.
It's one thing to offer tax incentives to businesses in order to encourage investment and economic growth; it's quite another to hand a company no-risk "loans" without requiring it to pay them back.
EADS has already used these "launch aid" subsidies to attack American manufacturing dominance in the commercial jetliner business, winning a majority of the market and compelling U.S. businesses to shed some 65,000 jobs. Now EADS is using one of these subsidized commercial jetliner designs and submitting it with minor changes as their tanker aircraft.
This laundering of illegal government subsidies from the commercial to the defense market puts the competing American manufacturing team headed by Boeing and supported by 300 suppliers nationwide at a significant competitive disadvantage, since they had to develop their design with private investment and at their own risk.
The U.S. trade representative has sued the European Union before the World Trade Organization, demanding that they eliminate their "launch aid" subsidies. However, the Department of Defense has not taken analogous actions to require EADS to compete fairly and divest its tanker proposal of these subsidies.
The Department of Defense is rightly concerned about promoting competition for the tanker contract, particularly since there are only two groups that have put in bids - Boeing and the EADS/Northrop team. However, competition is increased by lowering barriers to private investment and ensuring a level playing field - not by overlooking efforts by certain firms to rig the game with unfair government subsidies.
Here in Utah, we've strived to create a pro-business environment that cultivates the kind of cutting-edge manufacturers capable of delivering the state-of-the art equipment and parts that our military needs.
Congress and the administra13.tion should ensure that our defense procurement policy doesn't stack the odds against these hometown economic drivers.
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* GENE DAVIS, D-Salt Lake City, is the minority whip in the Utah Senate.
